The court affirmed that adjudication decisions under the Construction Industry Payment and Adjudication Act can coexist with civil suits, and challenges to adjudication decisions must meet specific statutory grounds.

JUDGMENT

Azlan Sulaiman J:

Introduction

[1] By Originating Summons No: WA-24C-145-09/2024 ("OS 145"), MN Permai Netcom Sdn Bhd (now known as Netcomx Sdn Bhd) ("MN Permai") is essentially invoking ss 15(b), 15(c), 15(d) and 16(1)(b) of the Construction Industry Payment and Adjudication Act 2012 ("Act") to:

(i) Declare that an Adjudication Decision dated 28 August 2024 ("Adjudication Decision") that Hallmark Season Sdn Bhd ("Hallmark") had obtained against it is invalid, null and void; or

(ii) Set aside the Adjudication Decision; or

(iii) Stay the Adjudication Decision pending the outcome of Kuala Lumpur Civil Suit No: WA-22NCvC-451 -08/2023 ("Civil Suit").

[2] By Originating Summons No: WA-24C-154-10/2024 ("OS 145"), Hallmark is in turn invoking s 28 of the Act to enforce the Adjudication Decision against MN Permai.

[3] As a matter of prudence, I heard both Originating Summonses together. This Judgment is thus on both.

[4] Further as a matter of prudence, I will decide OS 145 first and then only OS 154, not just because of the order in which they were filed but for the simple reason that, if the Adjudication Decision is set aside, then there will be nothing left to enforce.

Salient Background Facts

[5] By a Letter of Award dated 18 May 2022, MN Permai had engaged Hallmark to carry out certain works in a construction project in Kulim High Tech, Kedah Darul Aman ("Project").

[6] In August 2023, Hallmark and another contractor for the Project named Teraju Mentari Sdn Bhd ("Teraju") jointly filed the Civil Suit, principally to claim sums alleged to be due and owing from MN Permai to each of them under the Project. In the Civil Suit, MN Permai filed a counterclaim against both Hallmark and Teraju for sums exceeding their claims against MN Permai.

[7] By an Order made on 5 March 2024 ("High Court Order"), Hallmark's and Teraju's application for summary judgment of their claims against MN Permai ("summary judgment application") was dismissed, and the full trial was fixed for late-January 2026.

[8] On 17 April 2024, Hallmark issued a Payment Claim under the Act to MN Permai for payment of the same sum that it claimed against MN Permai in the Civil Suit.

[9] Despite MN Permai having objected to the Payment Claim and to Hallmark having brought the adjudication proceedings, primarily on the grounds of the pending Civil Suit for the same claim and the dismissal of the summary judgment application prior to the Payment Claim having been issued, the Learned Adjudicator appointed under the Act to adjudicate Hallmark's disputed claim nevertheless proceeded with the adjudication of it and made the Adjudication Decision.

[10] Under the Adjudication Decision, MN Permai is to pay to Hallmark, within 30 days of the Adjudication Decision:

(a) RM1,638,644.99, being the Adjudicated Amount;

(b) Interest on the Adjudicated Amount at the rate of 5% per annum from the date of the Adjudication Decision until realization;

(c) The Adjudicator's fee, Claimant's costs of RM20,000.00 and other sums

[11] MN Permai filed OS 145 on 13 September 2024, and Hallmark filed OS 154 on 8 October 2024.

[12] MN Permai has not paid to Hallmark any of the sums payable under the Adjudication Decision.

OS 145

Declaring The Adjudication Decision Void Under Prayer 1

[13] In prayer 1 of OS 145, MN Permai is seeking, inter alia, a declaration from this Court that the Adjudication Decision is invalid, null and void.

[14] However, the Act does not provide for any such declaration. None of the provisions of the Act that MN Permai cites in the intitulement of OS 145 do.

[15] The operative section of the Act for challenging an adjudication decision is s 15. Under s 15 of the Act, the Court 's powers for interfering with an adjudication decision are cofined to setting it aside, under any one or more of the four instances set out in limbs (a), (b), (c) and (d) thereof. Section 15 of the Act provides:

"15. Improperly procured adjudication decision

An aggrieved party may apply to the High Court to set aside